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Options  |  NOV 2003

Trading With Open Interest by John Boere

Trading With Open Interest by John Boere Analyzing the open interest of equities can provide insight into the direction of the market. Find out why the expiration price is being manipulated, how it can be calculated, and how you can trade it. Open interest is the number of open contracts of a given option series. An open contract is one that is not exercised, closed, or expired. One unit of open interest represents two parties: a buyer (long) and a seller (short). Open interest increases when a buyer opens a long position and a seller opens a short position at the same time. Open interest decreases when a buyer sells/closes a long position and a seller closes/covers a short position.

by John Boere

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